Crypto firm bankruptcies and resulting disruption in the crypto ecosystem will continue to exacerbate liquidity and regulatory concerns in this space. Signs of contagion are evident as prices of almost every cryptocurrency type have halved in recent months. Since all participants supporting the crypto ecosystem are at risk, managing that risk is critical.
Fund managers should be prepared on multiple fronts, as the following examples illustrate:
Everything, everywhere, all at once is our risk thesis for 2023, but one must not forget about concentration risk. This issue has rocketed up diligence agendas for LPs and GPs alike as the collapse of Silicon Valley Bank proved it really was the bank for venture capital.The entry of SVB into receivership on March 10, 2023 highlighted just how central it had become to U.S.
COVID-19 continues to disrupt normal business operations, creating liquidity problems and negative working capital for many companies. As fund sponsors take actions to help their portfolio companies navigate through this time, they should also sensitize directors to insolvency issues and the associated litigation risks.
Market participants welcome a clarification extending equitable subordination exemptions granted Sareb to those subsequently purchasing debt from Sareb.
On November 30, 2013, the Spanish legislator approved a recent amendment to Spanish insolvency law, introduced in March 2013, to clarify that a claim transferred to Spanish “bad bank” Sareb, and subsequently sold by Sareb to a third party, will also be exempt from equitable subordination risk.
Background
The Spanish Congress has approved important amendments into the so-called Spanish scheme of arrangements, to facilitate Spanish company refinancings.
The Spanish Council of Ministers has approved the Royal Decree Law 24/2012 (the RDL 24/2012), for the restructuring and termination of Spanish credit entities. This RDL entered into force on 31 August 2012.
In line with the trend of the first reform to the Spanish Insolvency Act of 2003 carried out on March 2009 (the 2009 Reform), new amendments to the Spanish Insolvency Act (the SIA) were approved on 4 October 2011 (the Amendment). This Amendment will enter into force on 1 January 2012.